I suspect that full security deposit forfeiture for lease violation may not be legal.  

We gave him 56k in deposits and he will not even pick up his phone or engage in a conversation.

I'm curious about this also, I've been testing Stessa but it's not intuitive and I keep finding weird glitches that make it almost more work than just entering transactions manually.At some point I found it had automatically added a full security deposit return after a move-out, despite me not having manually entered it nor there being a bank transaction - so I contacted Customer Service and then forgot about it because I was testing other software.

This includes offering incentives, lowering the rate and offering flexible security deposit alternatives.

Only move forward if they communicate clearly and offer milestone-based payments instead of big deposits.

Confirm Rent Roll + Property-Level DataMatch lease agreements, deposits, and collected rents to your books.

Coincidentally the list of repairs they emailed her equals the amount of her security deposit. 

They purchased using a program that finances 100% of your purchase/rehab on paper, and takes a 15% deposit as cash-collateral that they hold until you refinance.• $60k purchase• $35k rehab• $95k total rehab loan payoff• 15% deposit = $14,250 "down payment"• $126k ARV (confirmed via refinance appraisal, borrower expected this to be higher)• 80% rate/term refinance ($100,800 loan) @ 6.75% [700-719 FICO]• Applied $4k of deposit to payoff for an updated payoff amount of $91k• Cover closing costs with 80% r/t refi + $2k back to borrower at closing (still considered a r/t refi if under $2k) + remaining $10,250 deposit reimbursed after payoff = $12,250 total back to borrower• $4k of his deposit + closing costs for rehab loan = his "cash" in the deal• $1,250 market rents• Total PITI = $765.62• DSCR = 1.6327 I do not see the hold costs.  

So far so good.A few months later a nice 3/2 hit my radar and I financed the deal at $67k that rents for $825.I use a property manager here in Rome and they have been great to work with, although they do not have direct deposit, they do take care of everything and only charge 6% with no upfront fees.  

Os if they didn’t do that, the $400 comes out of tenants security deposit.